Clients Want to Give Money Away  Let Them

HOLLYWOOD, Fla.  Clients want to give back, and not just for the tax breaks.

Americans are really good at making money but were also good at giving, said Michael Roberts, executive vice president of Reliance Trust Co. at Pershings Insite conference. We are the most generous nation in the world giving $316 billion last year.

Roberts explained that the majority of his boomer clients are giving back because of a sense of responsibility to their community and religious institutions more than for the tax benefits.

Theres a definite business reason for advisors to take note. Its important to connect with them on that level. You become a trusted advisor and will have a client for life, he said.

However, it can be a challenge for many advisors to discuss philanthropy with clients. Unlike creating a portfolio or other financial planning services, the discussion involving donations to a charity focuses more on the personality of a client and less about numbers.

Advisors are used to talking about tangible items but when you start getting into heartfelt fuzzy type of emotions advisors struggle with the conversation, said William Hewitt, executive vice president of Crown Philanthropic Solutions.

He noted that in a recent study, roughly 90% of ultra-high-net-worth clients want to have a discussion about philanthropic planning within the first three meetings with new advisors. However, that happens less than half of the time. And even when it does, only 40% of those clients are satisfied with the conversation.

This isnt about just gaining a client for life. If this is handled well, you could retain this business over multiple generations. There is a 90% risk that you will not retain a clients assets through their kid, said Hewitt. Start talking to your clients families about whats important to them and gain visibility with their children. He said that this tremendous bridge to a clients family is due in large part to the advisor being associated with helping the family give back to an organization that they care deeply about.

In addition to becoming visible to a clients children, Hewitt explained that members of the millennial generation are already expressing a desire to donate to charitable organizations.

Younger clients are coming out of college where they are becoming more aware of social issues and what the mechanisms are in place for them to give back, he said.

However, the typical clients that will donate to charity will be households that are headed by a 65-year- old or older with $200,000 or more in investable assets, according to Roberts.

Looking to the future regarding regulations on charitable donations and increased tax security, Hewitt explained that for roughly 20 years Congress has been proposing changes that are constantly pushed back.

There is nothing on the horizon that would change the way we are doing business, said Hewitt.